Overture and Google: Trading places?

BambiFrancisco

SAN FRANCISCO (CBS.MW) -- Overture is one of the best online marketing companies, while Google is one of the leading search engines.

But in the last two weeks, they're increasingly trading places, or at least acquiring the assets that both sides lacked.

Tuesday's actions underscored this trend as both companies evolve in their ongoing mission to serve their ultimate master: advertisers.

Overture's
OVER, +15.79%
newly acquired AlltheWeb.com has a new face. The stripped-down, clean Web search site has no banner advertisements. The new site, which has a bare-bones appearance like Google, was unveiled Tuesday. Fast Search & Transfer sold AlltheWeb.com, along with other Web search assets, to Overture for $70 million in cash on Feb. 25.

For Overture, it was a move to understand consumer behavior in order to service its advertisers.

Meanwhile, Google on Tuesday announced it's getting into contextual link advertising, which essentially is a program that gets its advertisers in front of users who aren't just searching but rather gathering information from information sites.

Google signed on some tiny sites, like Howstuffworks.com, to put its advertisements in front of relevant content. The move is Google's way to flex its marketing muscles and provide more traffic, or qualified traffic, to its advertisers. Google boasted that its advertising network topped 100,000.

After all, the more educated or qualified buyer, or the one more likely to make a purchase, may be on a niche-information site as opposed to a search site.

Beyond search

Interestingly enough, DoubleClick
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which is less of a marketing company and more of an ad-service and technology company, said Tuesday it found that Web sites play a major role in the purchase process.

In the travel category, travel-related Web sites are the No. 1 driver of awareness, according to the DoubleClick survey. Following the Web sites, online marketing drives awareness.

Online search is the third driver of awareness.

The challenge with dealing with so many tiny sites, however, is just that: they're tiny and building up critical mass is tough.

"Google has to aggregate hundreds of these sites to make it work," said Craig Pisaris-Henderson, CEO of FindWhat.com
FWHT
a paid-search company that targets small niche sites. At the end of the fourth quarter, FindWhat.com had 22,500 advertisers advertising on 230 niche sites. Some of these sites search 500 searches a day. Google serves 200 million searches per day.

Beyond just niche sites, Google hopes to go to publishers that want to make money off of their excess inventory, or pages that get some traffic but not the majority of the traffic.

Google does not disclose how many Web sites or publishers it has signed up for its contextual-link advertising service.

Search-base click, content-base click

This service extends the distribution platform for Google's Ad Select advertisers, which pay Google only when someone clicks onto their advertisement.

That payment is based on what the advertiser bid against other advertisers to get a particular placement on a page that comes up for a keyword search. For an advertiser, that payment doesn't change whether the click comes from a keyword search or from a content-based page.

It can often be the case that an advertiser that didn't bid a lot for a particularly keyword has an advertisement that maps directly with a page filled with information and articles about that topic, said Jonathan Rosenberg, vice president of product management at Google. In the case, the result is that this particular advertiser gets top ranking on that particular page.

For example, Makco Distributing was the top advertiser (with the title "Transmission Coolers") on one of Howstuffworks.com's pages, titled How Automatic Transmissions Work. But on Google's search site, if someone typed in "transmission coolers," Makco's advertisement was not among the top 7 sponsored searches.

Google relies on its technology and not editors to determine which advertisement is more relevant to a content page.

For publishers, which are used to receiving advertising dollars based on impressions, Google pays them on a CPM (cost per thousand impression) basis rather than on a pay-for-performance fee.

"Predominantly, the way advertisers want to work with us is through a CPM model," said Susan Wojcicki, director of product management at Google.

Going beyond search

Going beyond search sites isn't novel, as other companies have been offering this service.

As reported in this column last month, Sprinks, a division of About.com, owned by publishing company Primedia
PRM, -0.88%
has quietly been providing a new advertising solution to online publishers.

Building upon the popular paid-search listings model, Sprinks is offering its stable of 12,000 to 15,000 advertisers the ability to buy contextual advertising on niche sites, such as About.com's network of sites, IVillage
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and CNet
CNET, +7.35%

For instance, on IVillage's home page there are links to the topic of "pregnancy" and "1st trimester." An advertiser could pay for those links rather than pay for those searched words, explained Lance Podell, general manager at Sprinks.

While ostensibly there are fewer phrases or words that can be available for advertisers, theoretically, these so-called contextual links receive more distribution - which is key to advertisers. In fact, Sprinks' advertising network pays up for it, said Podell.

The average price-per-click for contextual links is 43 cents vs. 17 cents for Sprinks' paid-search. Sprinks did not have any numbers on how many times a person clicked onto those advertisements since the company is just beginning to roll this service out.

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